(Filed under stock picks, stock picking, stock tips )

You might think we are crazy..The market is 51% down since the October 9,2009..Here is my input..In 1974,we had very similar things happen as today..2 new low points within a few months from the first low point–the 2nd low point was at a 12 year low as just like it is as of today..What happened–ask Mr Buffet if you dont know whom when he dipped in the market after a 5 year hiatus other than his Berkshire Hathaway holdings..The average investor made 74% in 2 years from that low point..So here is my call–do not short stocks or sell stocks right here at least in general if you have a lot of allocations..-You can reallocate to different stocks –but dont get of the market now..Where you should have been nervous was last summer and before then the summer before that–not now-51% lower than October 2007..You should be a lot calmer except if you keep shorting stocks.

If an investor hears the same stuff over and over again that the bottom isnt here yet –there is a strong likelihood –there may be too much pressure outside the door to come in without much pressure coming out..It reminds me of a show where I saw a car tested in the abysmal gloom of being submerged in water..If the car is completely submerged in water –the door that is –it can be opened easily, but if part of the escape door is submerged in water and the other part of the door is above water–its impossible to open that escape door if a car landed in a river. I heard these bottom pickers say the bottom isnt here till about when the Dow is 4000 to 5000..(As if a professional investor should even pay attention to the Dow instead of the S&P 500 anyhow). Too much talk of this really can be interpreted as too much outside money and very little money in the market..

(Article include these Tags stock picks, stock picking, stock tips)

Hence,many still in at this point arent going to be itching to get out now (many stockholders had foolishlessly gotten out the market between Sept ’08 and early Dec ’08 with the bear raids imploding all stocks including the baby with the bathwater). So when you see terrible jobless claims reports, and inflation-adjusted income declining to unheralded levels with healthcare income slightly increasing,they are heeded to but a 51% drop in the market has got to be heeded to also due to outside liquidity issues.They see the bottom which is basically the Dow 5000 and the S&P 650.. What happens is like a half-finished domino effect..Where the dominos start falling to a degree before completion of all standing ones..The bored outside money starts coming in when they see this bottom over and over again retested but not penetrated and the market bounces..Because bored money outside the market gets antsy..I dont known where the bottom is but clearly anyone is foolish to start getting out now in my option..I do see capitulation happening soon-maybe this week for at least a short tem upswing at least-it could start next week..Then some get afraid and feel they better start coming in the market….

A study in Britain concerning upward or downward turns in the market showed the most important factor–even over the economy–is liquidity..Sure to a degree,the bears state there isnt as much in people’s portfolios and hedge funds to break the tide wash of bears burying stocks..But dont take too much into that thesis..If one thinks there is less liquidity outside the market at these levels than when the Dow was at an all-time high and the S&P,they are fooling themselves..Remember,many institutional investors have been around decades weathering bear markets with the relief of bull runs..Get ready to do this ..Or let us do this for you by reading our blogs..Buy IBD,take 1 hour and go through stocks that are 90 or better as far as earnings growth–20-60 in relative price,an A in Sales + Profit Margins + Return On Equity….As you underline these stocks..Morning Star can usually tell you something about that stock’s place in its own industry ..Also,YahooFinance.com in competition can tell you how well this company may fair.. An owner earnings calculation will be in another blog that can give you a relative idea about if a stock is 1/3 or below in intrinsic value–a good relative risk sieve to use..Stocks that are below PEG of 1.00 for forward rolling 12 months in a multiple of its earnings and tend to be marked as buying cheap..However,there are many criteria besides this..Some strong growth low to mid-cap stocks like KTII (I have owned but dont own as of this writing) have a 20% ROE or more.Some have this ROE 20-25% and there cash flow per share is even below EPS-the cash flow per share can be found in ValueLine at the library or even in Key Statistics in Yahoo.finance.com..But do remember,low to midcap stocks tend to be hit hardest during bear raids and fastest but rebound the fastest..One stock I own that I wont divulge right now have a lot of debt ongoing but it is countered by a strong formula called ROIC/WACC–Return On Invested Capital over Weight of Average Cost of Capital in a strong growing industry that thrives in any type of economical type..We will go over these yardsticks in other blogs..But for now this final thought–in 1931-the last greatest downturn in the market that 2008 came second to was followed by a bear market ralley the following year with worst financial data than now..Just remember –liquidity makes all kinds of excuses to take one piece of good information and override many bad news data..But just remember–always keep your powder dry in this economical crises no matter what..Profit taking is much accepted in this market..Before the hungry bears try to make some money as opposed to a lot of money in 2008….And bottom pickers,eventually there will be a stage where bottom picking is out the door–just dont miss that opening to the sunrise while staring down the cellar too much…

Starting An Investment Club can be something that be beneficial for some people. But we really think what we offer here at this Blog is something that can benefit many who want some direction in trying to make money in the stock market !! it is tough and we hope they we can help !!

Both Rob and Mike have no shares in KTII as of right now…Please do your own independent research before you make an investment purchase..See our disclaimer.

(Topics Related stock picks, stock picking, stock tips)